Microsoft and the European Commission
After being presented with a fine of 2 million euros per day of noncompliance with the ruling of the European Commission (currently under appeal), Microsoft is the subject of a new anti-trust complaint to the European Commission by the European Committee for Interoperable Systems (ECIS) - a concerted front representing IBM, Oracle, Sun, Nokia, RealNetworks and others. According to Australian IT the new complaint relates to anti-competitive behaviour by Microsoft, such as the Microsoft Office software that does not permit rivals to interoperate properly with the Windows OS.
My eyebrows went up last year at the sheer size of the fine issued to Microsoft, and the daily increment. Is must be, I imagine, be a very effective way to compel rapid compliance. I can't help but think however that the fine is tailored to Microsoft as respondent. Would anti-competitive behaviour by a Flemish cheeseware manufacturer with a yearly gross of $1 million receive a fine like that? I think not. So the fine is tailored to the subject, not to the offence, which does not strike me as fair.
We all like to root for the underdog, meaning against the overdog. There is no dog more over than Microsoft in the software industry. But anti-trust actions are chary things. In business, the company that is better at doing business makes more money and can grow faster. True, unethical practices can also boost a company. But it does not automatically follow that a company that does better than all others in its industry is using unethical practices. I suspect the primary reason rival companies oppose Microsoft through litigation is because they are rivals, and because it is a cost-effective way for them to restrain Microsoft's success and thus optimise their own opportunities. I would rather see businesses succeed by doing successful business, rather than by tripping the runners in front of them. And the European Commission is not exactly a criminal court. It is simply ruling whether Microsoft's legal business practices are damaging to the industry as a whole.
Microsoft has produced the most widely employed operating system for personal computers. They have pursued a policy of integrating applications with their operating system, which makes it difficult to opt-out of using the Microsoft application and using a rival application instead - for example, Microsoft's Internet Explorer (IE), the Microsoft web browser, is an integral part of the Windows desktop now. You can install another browser, but you can't get rid of IE - and many people will use it rather than trouble themselves with finding another. Media Player is another example. Microsoft Office. The list goes on. Microsoft might have intentionally pursued this policy to squeeze out rivals - companies that make money by producing applications that work in the Microsoft operating system, much like non-Toyota parts for your Toyota Corolla - but they might also have pursued it entirely, or at least primarily, because integration is the direction in which personal computer software is evolving.
It seems to me that the position of the members of the ECIS is perhaps like that of companies manufacturing parts for another company's car. Do such companies have a right to demand that cars be made in a certain way to ensure that the parts they sell will not become obsolete?
Microsoft is faced, if they cannot win a legal challenge, with either modifying their software to fit the ruling of the European Commission (a task which may cost a huge amount of money), or perhaps being forced to withdraw from the European market. The ECIS is presumably betting on the former, since without Microsoft operating systems in which their applications can be installed, they might have to - well, they might have to produce software that works in a non-Microsoft operating system, or produce one of their own. And how could that possibly be fair?
My eyebrows went up last year at the sheer size of the fine issued to Microsoft, and the daily increment. Is must be, I imagine, be a very effective way to compel rapid compliance. I can't help but think however that the fine is tailored to Microsoft as respondent. Would anti-competitive behaviour by a Flemish cheeseware manufacturer with a yearly gross of $1 million receive a fine like that? I think not. So the fine is tailored to the subject, not to the offence, which does not strike me as fair.
We all like to root for the underdog, meaning against the overdog. There is no dog more over than Microsoft in the software industry. But anti-trust actions are chary things. In business, the company that is better at doing business makes more money and can grow faster. True, unethical practices can also boost a company. But it does not automatically follow that a company that does better than all others in its industry is using unethical practices. I suspect the primary reason rival companies oppose Microsoft through litigation is because they are rivals, and because it is a cost-effective way for them to restrain Microsoft's success and thus optimise their own opportunities. I would rather see businesses succeed by doing successful business, rather than by tripping the runners in front of them. And the European Commission is not exactly a criminal court. It is simply ruling whether Microsoft's legal business practices are damaging to the industry as a whole.
Microsoft has produced the most widely employed operating system for personal computers. They have pursued a policy of integrating applications with their operating system, which makes it difficult to opt-out of using the Microsoft application and using a rival application instead - for example, Microsoft's Internet Explorer (IE), the Microsoft web browser, is an integral part of the Windows desktop now. You can install another browser, but you can't get rid of IE - and many people will use it rather than trouble themselves with finding another. Media Player is another example. Microsoft Office. The list goes on. Microsoft might have intentionally pursued this policy to squeeze out rivals - companies that make money by producing applications that work in the Microsoft operating system, much like non-Toyota parts for your Toyota Corolla - but they might also have pursued it entirely, or at least primarily, because integration is the direction in which personal computer software is evolving.
It seems to me that the position of the members of the ECIS is perhaps like that of companies manufacturing parts for another company's car. Do such companies have a right to demand that cars be made in a certain way to ensure that the parts they sell will not become obsolete?
Microsoft is faced, if they cannot win a legal challenge, with either modifying their software to fit the ruling of the European Commission (a task which may cost a huge amount of money), or perhaps being forced to withdraw from the European market. The ECIS is presumably betting on the former, since without Microsoft operating systems in which their applications can be installed, they might have to - well, they might have to produce software that works in a non-Microsoft operating system, or produce one of their own. And how could that possibly be fair?
posted by Hiraethin at 6:59 pm
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